Brazil government revises IOF taxes after pushback, tweaks investment levies
The government had announced in May the increase of the IOF tax, including on credit and foreign-exchange transactions, to boost public revenues.
The move triggered strong pushback from both Congress and market players, prompting the government to seek an alternative path as lawmakers threatened to overturn the measure.
Wednesday's executive order, which will need Congress' approval to remain valid, includes measures previously unveiled by Finance Minister Fernando Haddad, such as taxes on investment income and capital gains, including stocks and bonds, at 17.5%, replacing the current sliding scale of 15% to 22.5%.
It also sets a 5% income tax on investments currently except from income levy, and raises the income tax rate levied on so-called interest on equity (JCP) payments to 20% from 15%.
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